Treasury Secretary Janet Yellen urged Congress on Aug. 9 to raise the debt ceiling through “regular order,” as Senate Democrats get ready to pass the $1.2 trillion bipartisan infrastructure bill this week and introduce their $3.5 trillion spending package.
However, neither measure addresses increasing the debt ceiling.
The debt limit suspension expired at the end of July and failure to increase or suspend the statutory limit—now at $28.5 trillion—could trigger another federal government shutdown or a debt default.
“In recent years, Congress has addressed the debt limit through regular order, with broad bipartisan support. In fact, during the last administration, Democrats and Republicans came together to do their duty three times. Congress should do so again now by increasing or suspending the debt limit on a bipartisan basis,” Yellen said in a statement.
Senate Majority Leader Chuck Schumer’s (D-N.Y.) office didn’t immediately return a request for comment.
According to the Congressional Research Service, regular order (pdf) is viewed as “a systematic, step-by-step lawmaking process that emphasizes the role of committees: bill introduction and referral to the committee; the conduct of committee hearings, markups, and reports on legislation; House and Senate floor consideration of committee-reported measures; and the creation of conference committees to resolve bicameral differences.”
However, because of fundamental policy and political differences between the two parties that often create gridlock, “the majority party may turn to nontraditional processes, in whole or in part, to advance the legislative agenda.”
Since senators are scheduled for a summer intermission, the debt ceiling will likely be addressed when they return in September, leaving them little time to resolve the heated issue through regular order. In addition, Republican Senate leader Mitch McConnell (R-Ky.) has indicated that he and his party wouldn’t support raising the debt limit given the massive spending by the Biden administration.
McConnell told Punchbowl News in July that he “can’t imagine there will be a single Republican voting to raise the debt ceiling” in light of how much Congress has already spent.
In a July letter, Yellen said that most of the debt to date was accrued prior to the Biden administration and that Republicans and Democrats have and should work together to address the issue.
But Republicans have criticized President Joe Biden and Democrat lawmakers’ massive spending on the March $1.9 trillion spending bill, saying it was untargeted and wasteful spending that further increased the national debt. The majority of the Senate GOP is opposed to the current $1.2 trillion bipartisan infrastructure bill, which most Republicans say includes too many items not related to core infrastructure.
Democrats appear to have enough GOP support to pass the $1.2 trillion bipartisan infrastructure bill on Aug. 10. However, a majority of Republicans are opposed to the $3.5 trillion spending package.
Sen. Rick Scott (R-Fla.) told “Fox News Sunday” that lawmakers agreed at a caucus meeting not to support raising the debt ceiling “without structural change” but didn’t elaborate.
“Let’s live within our means, quit running up the debt,” he said.
In her appeal to lawmakers, Yellen said, “This is a shared responsibility, and I urge Congress to come together on a bipartisan basis as it has in the past to protect the full faith and credit of the United States.”
If lawmakers can’t resolve the debt ceiling issue and the government defaults, it would set off a wave of higher borrowing costs, affecting the entire economy. Historically, the U.S. government hasn’t defaulted on its debt and isn’t expected to do so this time.
Since July 31, the Treasury has been forced to use emergency measures to conserve cash so the government can keep paying what is owed to bondholders, veterans, and social security recipients.
Yellen has warned that Treasury will not be able to sustain emergency payments for too long, owing to the massive COVID-19 stimulus measures that Congress approved under the Trump and Biden administrations.